Cargo Business Newswire Archives
Summary for December 10, 2012 - December 14, 2012:

Monday, December 10, 2012

Top Story

Port of Oakland employees approve new labor contract

Port of Oakland employees, including members of SEIU 1021, have ratified a four-year contract, putting to rest a labor contract dispute that included a one-day port shutdown November 9, union officials said. The union represents more than 200 Port of Oakland workers in jobs that include maintenance, electrical work, custodial duties and security.

Members of SEIU 1021 approved the contract, ILWU officials said Sunday, which includes a $3,500 signing bonus for employees, a 2.5 percent cost-of-living increase in 2013 and 2014, and other measures.

The contract needs to be approved by the Board of Port Commissioners before it's official.

"It's unfortunate that it had to take a one-day strike to get to the table and get this deal," said Pete Castelli, executive director for SEIU 1021.

Port spokesman Isaac Kos-Read said port officials would not comment until commissioners vote on the agreement, which will probably occur on December 20.

For more of the SF Gate story:

How $1B a day statistic for cost of L.A.-Long Beach port closures went viral

The cost of the port closure at Los Angeles and Long Beach due to the recent eight-day strike by the clerical unit of the International Longshore and Warehouse Union was widely being reported at $1 billion per day, but an economist says otherwise.

The $1 billion statistic had no factual basis, according to an article written by international trade economist Jock O'Connell in the Sacramento Bee, who said he "was the one who inadvertently gave it life."

The ILWU clerical members went on strike at the ports of Los Angeles and Long Beach from November 27 to Wednesday, December 5. Dockworkers honored the ILWU picket lines and the strike closed down the two ports, which handle 40 percent of container cargo in the U.S.

The strike prevented ships from being loaded or unloaded and thus stalled the transport of large quantities of imports and exports.

Once the strike started, questions about the financial ramifications of the closure arose. Ronald White, a writer for the Los Angeles Times, called O'Connell on the third day of the strike to ask the approximate cost.

O'Connell said he told White the cost of the strike couldn't be calculated until it was over because its length would largely determine its severity. He said he gave White the dollar value of cargoes passing through the ports at this time of year, which was around $1.125 billion a day. O'Connell said White's article appeared in the Times on Dec. 1 and correctly reported: "About $1 billion a day in freight moves through the ports at this time of year."

But by that afternoon, the $1 billion figure, agitating anti-union sentiment, was widely being reported as the strike's daily price tag in newspaper headlines and national news reports, politician's statements, and even in the letter of the National Retail Federation to President Obama.

But apart from a small volume of perishable goods, all of those stranded shipments would eventually get to market. The $1 billion a day figure was wrong.

Only after the strike ended did some in the media begin questioning the number, O'Connell writes, while national news columns like the Wall Street Journal's Market Watch continued to report the cost of the eight-day strike to have been "an estimated $8 billion."

On Wednesday, Times writer Michael Hitzik wrote a column entitled "Port strike numbers are out to sea," and media critic Mark Lacter published a derisive review of the strike's press coverage on the L.A. Observed website. Lacter named O'Connell as the source of the spurious information.

O'Connell wrote it's possible that the strike's "resolution was indeed hastened by the popular belief that, at a billion dollars a day, a long strike could cripple the nation's fragile economic recovery."

For more of the Sacramento Bee story:

Changes in leadership at Crowley Maritime

Crowley Maritime Corporation announced changes last week to its senior leadership team in its shipping and logistics divisions and placed their U.S. commercial activities under single leadership. The new appointments are effective Jan. 1.

Frank Larkin was promoted to senior vice president and general manager of logistics, and will now, in addition to managing the entire logistics enterprise, oversee U.S. sales, marketing, customer care and pricing for both logistics and liner services. Larkin, who most recently served as vice president of sales, marketing and customer care for Crowley's liner and logistics groups, rejoined the company last year after working for Hamburg Süd as senior vice president for 12 years.

Steve Collar, currently managing logistics, was appointed senior vice president and general manager of Latin America services. Collar will run operations and foreign commercial activities associated with Crowley's liner cargo transportation between the U.S. and Central America. Prior to assuming his current position, Collar, who joined Crowley in 1977 as a deckhand, served as senior vice president and general manager of technical services.

John Hourihan, currently managing Latin America services, was appointed senior vice president and general manager of Puerto Rico and Caribbean services. He replaces John Douglass, who will be retiring Dec. 31 after 25 years of service to Crowley.

In his new role, Hourihan will be responsible for operations as well as foreign commercial activities associated with Crowley's liner cargo transportation between the U.S., Puerto Rico, the Bahamas, Eastern Caribbean and Western Caribbean, including Haiti, the Dominican Republic and Cuba. Hourihan joined Crowley in New Jersey in 1987, managing Crowley's Far East service.

"I want to congratulate and thank John Douglass for 25 years of distinguished service to the company," said Tom Crowley, company chairman, president and CEO. "John leaves big shoes to fill, but I am looking forward to working with our realigned leadership team to see how we can leverage their skills, experience and new perspectives to continue to grow Crowley and make it an even better company."

Mississippi River likely to dwindle to 9-foot depth in January, prompting shipping closure

Shipping companies are preparing for the closure of a 200-mile expanse of the Mississippi River from St. Louis and Cairo, Ill.

National Weather Service hydrologist Mark Fuchs says a new forecast makes it likely that water levels in that portion of the Mississippi could drop below 9 feet sometime next month, making it impossible for barges to pass. The timing changed because low water levels are prompting moisture from the Missouri River flood plain to flow back into the river, Fuchs says. The Missouri feeds into the Mississippi.

"I haven't seen great reason for optimism yet," Fuchs says. Because of drought conditions, "I would be surprised if we don't set low water records at St. Louis and other locations this winter season." A drop in Mississippi water levels below 9 feet "appears unavoidable" at some point, he says.

Governors and members of Congress have asked President Obama to order the Army Corps of Engineers to overturn its decision to decrease the release of water from reservoirs upstream into the Missouri River. The annual reduction is routine and meant to ensure sufficient reservoir levels and avert flooding.

The Army Corps of Engineers has refused requests by politicians and barge operators to release more water from the Missouri River, asserting that the Mississippi River it feeds still will remain open for shipping, according to the Huffington Post. Army Assistant Secretary Jo-Ellen Darcy, in a Thursday letter obtained by The Associated Press, told lawmakers from Mississippi River states she doesn't consider it necessary to boost Missouri River flows into the Mississippi.

Darcy also backed up what the corps has been saying for weeks, says the Huffington Post: Reducing the Missouri's flow is necessary because low levels in its upper basin could negatively affect recreation in the upper Missouri while impacting drinking water supplies, animal habitat and hydropower.

Industry groups caution that a temporary river closure would stall movement of $7 billion in commodities.

Dan Mecklenborg of Ingram Barge based in Nashville says the possible Mississippi shutdown already has affected business, as some customers have canceled scheduled barge shipments. He said barges are loading to 8-foot drafts rather than the usual 9 feet or above. Ingram now is asking customers to sign contracts that require them to pay rent on barges if they become stranded, Mecklenborg says.

Canal Barge, based in New Orleans, is now limiting loads to 8-foot drafts. President and CEO Merritt Lane has concerns how a river shutdown will effect his family business and its 630 staff. "It would be very detrimental to the national economy; it will hurt our industry," he says. "It's not good for Christmas bonuses. It's just not good."

For more of the USA Today story:

Coast Guard and Chinese-flagged container crew save 4

The U.S. Coast Guard and a Chinese-flagged container ship crew rescued four people aboard a sailboat that became disabled near the U.S. Virgin Islands.

Spokesman Ricardo Castrodad says one U.S. citizen, two French citizens and a person with dual citizenship were on board. He says the boat embarked from Virginia and was on its way to St. Maarten in the Caribbean. He said the Coast Guard received help from a crew aboard the container ship Lingue, which changed course to help the distressed vessel.

Castrodad said the sailboat became disabled Tuesday in 10-foot seas more than 215 miles off St. Thomas. He said it was towed to St. Thomas Friday.

For more of the Greenfield Reporter story:


Tuesday, December 11, 2012

Top Story

ILA votes to strike if no contract by end of year

On Monday, East Coast and Gulf Coast dockworkers, represented by the International Longshoremen's Association, voted to strike unless a contract is reached by the December 29 expiration date.

Contract negotiations between the ILA and the United States Maritime Alliance have been ongoing since the contract expired on September 30, 2012. The newest round of talks started on Monday in Florida.

The National Retail Federation wrote a letter to both sides on Monday, urging them to come to an agreement by the deadline.

"We understand and recognize that there are tough issues that need to be resolved," said Matthew Shay, NRF president and CEO in the letter. "The issues will only be resolved, however, by agreeing to stay at the negotiating table until a final deal is reached. Failure to reach agreement will lead to supply chain disruptions which could seriously harm the U.S. economy."

As of late Monday afternoon, a strike was still not definite and talks were continuing, according to ILA spokesman Jim McNamara.

For more of the Virginia Pilot Online story:

Report: December retail imports to rise 3.9 percent in December

A new report indicates imports at major U.S. container ports are expected to rise 3.9 percent in December 2012, despite a strike that started November 27 and closed the ports of Los Angeles and Long Beach for approximately eight days.

Retailers are keeping an eye on a possible strike on the East and Gulf coasts, according to the monthly "Global Port Tracker" report released Monday by the National Retail Federation and Hackett Associates.

"After a strong kickoff on Black Friday and Cyber Monday, the holiday season is looking good and these numbers reflect that," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Nonetheless, we narrowly avoided what could have been a long-term disruption with the strike in Los Angeles and Long Beach and don't want to run that risk on the East Coast and Gulf Coast."

The major U.S. retail ports tracked in the report include the ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the East Coast, and Houston on the Gulf Coast.

U.S. ports followed by Global Port Tracker handled 1.39 million TEUs in October, the latest month for which hard data are available. That was down 1 percent from September, but up 5.2 percent from October 2011.

November was estimated at 1.22 million TEUs, down 5.6 percent year-on-year, the report said. The downturn was due in part to the strike at the Ports of Los Angeles and Long Beach, but also because November is a routinely weak month after the lion's share of holiday cargo has been delivered.

According to the report's predictions for the coming year, December volume at the Global Tracker ports will come in at 1.27 million TEUs, up 3.9 percent from 2011.

The January 2013 forecast up 2 percent year-on-year to 1.31 million TEUs, February cargo volume is expected to rise 5.9 percent to 1.15 million TEUs, March will be up 2 percent at 1.27 million TEUs, and April is predicted to be up 3.2 percent to 1.35 million TEUs.

NRF predicts that 2012 holiday sales will increase 4.1 percent to $586.1 billion. The first half of 2012 totaled 7.7 million TEUs, up 3 percent year over year. For the full year, 2012 is expected to total 15.8 million TEUs, up 2.5 percent from 2011.

Maritime Director James Kwon steps down, Port of Oakland releases fiscal investigation documents

Port of Oakland officials Omar Benjamin and James Kwon ignored spending policies by using a port credit card on two separate occasions at strip clubs, then provided false information about who attended, according to an outside investigation report released Monday by the port.

As a result, on Monday the port announced Kwon agreed to "retire" as maritime director effective December 28, 2012. Since Executive Director Benjamin resigned in November, Kwon is the second executive to depart due to inappropriate expenses billed to the port, including a $4,500 strip club tab from 2008 disguised as a dinner reception for shipping executives.

The investigation found the two executives also charged $925 at another strip club outing in Minneapolis in September 2009 and categorized it as a "business retention meeting," even though no port customers attended, according to Arnold & Porter LLC, investigators hired by the port to look into the incidents. Investigators found only one other possible violation in which an employee expensed an item twice.

On Monday the Port of Oakland released materials that resulted from its investigation into misuse of public funds, including the July 2012 port purchasing card audit, an investigative report by independent counsel Arnold & Porter, revised port policy on redacting expenses and a plan to prevent improper expenditures in the future.

The port stated it has received repayment of the public funds spent on the two identified improper expenditures.

The internal audit of $1.9 million spent in 2011 by 82 port staff members and board commissioners with agency credit cards caught many examples of potentially wasteful and unnecessary expenses, some of which possibly violated federal and state laws, according to the Oakland Tribune. Gifts and expensive giveaways by the port totaled $67,404.

Auditors also found at least 16 instances in which cardholders violated spending limits on single purchases by splitting purchases totaling $89,319, according to the audit released on Monday. The auditors labeled another $200,000 in other expenses as questionable, including a lush $2,842 managers retreat and a $2,500 two-hour holiday cruise.

The port defended the spending as part of attracting and keeping clients.

"It's a new day at the Port, and we are pleased to be releasing comprehensive information on the problems we've faced and how we're addressing them," acknowledged Gilda Gonzales, board president. "While the vast majority of what was uncovered was an organization of people doing their jobs ethically and responsibly, we also found outdated policies, a few irresponsible actions, and a few isolated cases of improper expenditures."

For more of the Oakland Tribune story:

CMA Terminals California becomes investor in Pier J Terminal at Long Beach

CMA Terminals California is now a stakeholder of the Pacific Maritime Services Joint Venture, along with SSA Marine and COSCO, to operate the Pier J Terminal at the Port of Long Beach, according to an announcement by CMA CGM Group.

Pier J Terminal is CMA CGM's first port investment on the West Coast of the U.S., and its third in the U.S. CMA CGM currently calls at Pier J with its "Pearl River Express" service that uses vessels with a 9600-TEU capacity.

Pier J Terminal features automated equipment able to handle up to 1.5 million lifts annually. The terminal has an 1800-meter-long quay, 17 Gantry cranes, and a 15.8-meter draft.

"This first new investment for our Group demonstrates CMA CGM's strong involvement to develop transport infrastructure and to improve quality of service to our customers," said Farid Salem, CMA CGM Group executive officer. "By investing in Pier J, the Group ensures that the largest vessels deployed in the transpacific trade will be efficiently managed."

CMA CGM Group has invested in 29 container terminals worldwide.

11 crewmembers rescued from listing cargo ship

Eleven Chinese sailors were rescued from their tilting cargo ship in South Korean seas close to the border with North Korea, the Coast Guard said Tuesday. All are in good health.

The 1,996-ton Cambodian cargo ship, carrying steel products, sent out an emergency signal at around 5:40 p.m. as it was listing on its right side south of Daecheong Island.

A passing ship had already rescued the crewmembers by the time the Coast Guard dispatched a helicopter and a patrol boat to the scene.

The cause of the accident is unknown.

For more of the Yonhap News Agency story:


Wednesday, December 12, 2012

Top Story

Hanjin extends Port of Seattle lease through 2025

South Korean shipping line Hanjin Shipping continue to call at the Port of Seattle, now that the port commission has approved a lease extension with Total Terminals, a subsidiary of Hanjin Shipping, at Terminal 46 through 2025. 

According to the Seattle Times, Hanjin will receive a $4 million fee, funded from port maritime operating revenues, and up to $35 million in capital improvements, small concessions compared to the business Hanjin brings to the port. The port will also reportedly make concessions on the rate structure.

"We worked very hard to keep TTI in the Port of Seattle," said Gael Tarleton, president of the Port of Seattle Commission. "The cargo handled at T-46 means thousands of jobs and economic benefit for our region, which gets us closer to achieving the goals of the Century Agenda, calling for increasing freight volume at the port to 3.5 million TEUs in the next 25 years."

"We are pleased to continue our partnership with the Port of Seattle for the next 13 years," said Tae-Hoon Kim, vice president and manager of Hanjin Shipping. "Hanjin Shipping and Port of Seattle have been working together since 1986 and we hope our partnership will last in harmony and mutual growth."

Hanjin has been operating in Seattle harbor since 1981, and has been at Terminal 46 since 1986. Terminal 46 generates approximately 20 percent of the container cargo currently passing through the port. Cargo volumes at Terminal 46 are estimated to annually support 3200 jobs. Terminal activities are estimated to generate more than $370 million in business revenue annually and over $24 million in state and local taxes.

Last year, the Port of Seattle handled more than 2 million TEUs, and $2.6 billion in revenue for the local economy. 

For more of the Seattle Times story:

Port of Virginia November container volume up 21 percent

Local Virginia ports had their second busiest month ever in November 2012, partly due to increased cargo traffic that was diverted to Virginia because of Hurricane Sandy.

In November the Port of Virginia handled 198,720 TEUs, a 21 percent hike year over year, according to a Tuesday statement from the Virginia Port Authority. Virginia handled 6,500 extra containers last month that were diverted from the storm-riddled Port of New York/New Jersey and 3,500 vehicles headed to that region were unloaded at the state's Newport News Marine Terminal.

"We came within 728 TEUs of setting a new port record … set back in October 2007," said Rodney W. Oliver, VPA's interim executive director.

For the year, the ports have handled 1,920,137 TEUs, an 8.9 percent increase over 2011 through November.

For more of the Daily Press story:

Largest container ship in the world on European maiden voyage

The Marco Polo, currently the largest container ship in the world, is arrived at Hamburg Wednesday. The ship, put into service a month ago by French container line CMA CGM, is on its maiden voyage in European seas, and Hamburg is the second port of call in Europe after Southampton Tuesday.

With a length of 1,300 feet long, a width of 54 meters and a capacity of 16000 TEUs, the Marco Polo takes the title of the largest container ship from the Emma Maersk class.

During this trip, the ship only carried 4,000 TEUs -- otherwise the mighty vessel would have been unable to navigate the waters of the Elbe River, too shallow to accommodate the latest generation of super-sized container carriers.

For more of the Spiegel story:

Massive illegal ivory haul found in two containers in Malaysia

Malaysian customs officials have seized an enormous haul of 1,500 elephant tusks worth $19 million. The illegal ivory weighs 20 and 24 tons, as much as all the illegally traded ivory seized in the world in 2011.

The shipment was found in two shipping containers on Monday at container terminal Port Klang, near Kuala Lampur. It was on the way from Togo in West Africa to China,.

"The two containers were found to be filled with sawn timber. Inside the wood there were secret compartments that were filled with elephant tusks," said state customs director Azis Yaacub.

For more of the Guardian story:

11 crewmembers rescued from listing cargo ship

Eleven Chinese sailors were rescued from their tilting cargo ship in South Korean seas close to the border with North Korea, the Coast Guard said Tuesday. All are in good health.

The 1,996-ton Cambodian cargo ship, carrying steel products, sent out an emergency signal at around 5:40 p.m. as it was listing on its right side south of Daecheong Island.

A passing ship had already rescued the crewmembers by the time the Coast Guard dispatched a helicopter and a patrol boat to the scene.

The cause of the accident is unknown.

For more of the Yonhap News Agency story:


Thursday, December 13, 2012

Top Story

Update: Pacific Northwest Grain owners and ILWU contract talks

At the request of the Federal Mediation and Conciliation Service, the International Longshore and Warehouse Union Locals 4, 8, 19 and 23 met Tuesday and Wednesday with the Pacific Northwest Grain Terminal owners to discuss contract negotiations.

According to a statement issued by the FMCS, at the end of today's meeting, the parties agreed they need additional time to review their options. In the meantime, they have agreed to an FMCS request that they refrain from any public comments regarding the status of negotiations.
No additional meetings have been scheduled at this time.

Talks have intensified since the union's contract with Grain Terminals expired on September 30. A federal arbiter was brought in, but employers were asking for concessions similar to those accepted early in the year by longshoremen at a Longview, WA terminal, a contract broadly criticized by union membership as being a bad deal for members. A strike was narrowly averted when on November 28, the deadline of the "final offer" from the employers passed, and both sides agreed to go back to negotiations.

A lockout at the terminals could adversely affect 25 percent of the country's grain exports.

Meat exporters back call for Russia to suspend entry restriction

By Richard Knee

A meat exporters' group is backing a U.S. call for Russia to suspend its import ban on shipments of beef and pork that are not pre-certified as free of ractopamine, a feed additive used to make livestock lean.

The request came from U.S. Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack after Russia's Veterinary and Phytosanitary Surveillance Service announced the ban on Dec. 5. Canada also is asking Russia to suspend the restriction.

The Russian agency's declaration means that meat shipments must be accompanied by certified lab test results showing the product is ractopamine-free, but fulfilling the requirement is impossible because the U.S. Department of Agriculture has no program for testing and certifying that the product has no residues, said Joe Schuele, communications director of the Denver-based U.S. Meat Export Federation.

In the first 10 months of this year, the United States exported 73,625 metric tons of beef valued at $283.7 million and 86,566 metric tons of pork valued at $247.6 million to Russia, Schuele said.

Russia accounts for about 8 percent of the volume and 6 percent of the value of U.S. beef exports, and about 5 percent of both the volume and the value of U.S. pork exports, he said.

That country ranks sixth in volume and fifth in value among U.S. beef export destinations, and sixth in both categories among U.S. pork export destinations, he said.

Discussions on the matter between U.S. and Russian officials are reportedly in progress. According to the New York Times, some observers see Russia's action as retaliation for U.S. legislation punishing Russian officials accused of human rights violations.

Maersk and Hanjin receive annual carrier awards from Scoular

Maersk Line and Hanjin Shipping are the winners of the Carrier of the Year Award and the Award for Operational Excellence, respectively, awarded by Scoular Company, a commodity supply-chain risk firm. Scoular officials will meet with teams from both companies in December to present the awards.

Maersk was selected for the Carrier of the Year Award due to total volume of containers loaded, and their sales force engagement, lane diversity, and operational performance. Hanjin won for operational excellence due to efficiencies in bill of lading issuance, customer service and booking fulfillment, effective e-commerce tools, and consignee satisfaction.

Award winners were chosen after a comprehensive evaluation completed by Scoular trade and operations staff.

"We're thrilled to recognize these two outstanding carrier partners of our BCO and NVO businesses," said John Messerich, senior vice president. "Our experience with both Maersk and Hanjin has been excellent, and we've found their performance to be superior."

Port of Long Beach about to finalize deal on temporary headquarters

Port of Long Beach officials expect to buy a former Boeing Company building to use as a their new headquarters later this month, at a cost of $14.25 million.

The City Council approved an $18.3 million adjustment to the port's budget for the purchase and renovation of the building Tuesday night. Port Executive Director Christopher Lytle said the facility will be "temporary."

The Board of Harbor Commissioners agreed to purchase the building in November as a temporary home for administrative staff. A staff report on the effort to find a permanent home in downtown Long Beach will be delivered in a public session in early 2013, said Harbor Commission President Susan Wise.

"We are interested in having an open and transparent process that's inclusive and that will lead us to a decision that can be executed in the reasonably near future and get us into the permanent headquarters for a long time to come," Wise said.

The Boeing facility at 4801 Airport Drive is 575,000 square feet. Moving costs will add $1 million to the deal price, and building upgrades will add another $9.1 million. Lytle said most of the improvement costs, $4.6 million, will be used to renovate the "gutted" first floor. Other expenses include $1 million for furniture and $1 million for telecommunications.

For more of the Long Beach Press-Telegram story:

Mariana offers U.S. West Coast service to Micronesia

Mariana Express Lines, a regional ocean container carrier that runs a service between islands in the Pacific Ocean and Asia and Australia, today announced it will offer a U.S. West Coast service to a few Micronesia locations, effective commencing on December 15th.

The Micronesia Express service will offer weekly departures from Los Angeles, Oakland and Tacoma to the Pacific islands of Majuro, Pohnpei, Chuuk, Yap, Palau and Saipan.
Horizon Lines will serve as dedicated shipping agent for the container service, providing U.S. sales, vessel connections and logistics support. Mariana containers will be carried by Horizon Lines vessels between U.S. West Coast ports and Honolulu, and then will be transferred onto Mariana vessels for Pacific island connections.

Cargo ship runs aground off coast of Spain

An fuel spill was avoided today after a British cargo ship ran aground off the coast of Spain yesterday.

The eight-hour ordeal began at 4.15 a.m. when the coastal officials for the northern province of Asturias saw that the 2,545-ton Beaumont was too close to rocks. Spain's Maritime Rescue Service received a distress signal at around and immediately contacted the vessel.

The helicopter, speedboat and tugboat were dispatched, and the tugboat finally managed to free the ship from the rocks shortly after 1:00 p.m.

The four crew members were unharmed.

A spokesman for the Coastguard told El Mundo newspaper that damage had been caused to the ballast tank but a fuel spill had been averted.

For more of the Daily Mail story:

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